Nestle India Q1FY26 Results Preview: Profit Likely Up 2% YoY, But Margins May Be Under Pressure

Nestle India Ltd. is set to announce its results for the March- June quarter of the current fiscal year i.e Q1FY26 today. The company, one of India's major FMCG brands, owns household names like Maggi, Nescafe, Milkybar, and Milkmaid and operates across categories including food, beverages, dairy, and nutrition. After posting a healthy growth in the previous quarter, Q4FY25, Nestle India is expected to see positive numbers in this quarter as well.

Nestle India Q1FY26 Estimates

Nestle India's revenue for Q1FY26 is projected at Rs. 5,089 crore, with a 5.7% YoY growth but a 7.5% drop from the previous quarter, according to estimates from Motilal Oswal Financial Services.

Despite this, volume growth is expected to come in strong at 8% YoY, compared to just 2% in Q1FY25 and 3.3% in Q4FY25, because of a pickup in consumer demand, especially in core brands like Maggi noodles and Nescafe.

Profit and Margins Under Pressure

Nestle India's EBITDA (earnings before interest, tax, depreciation, and amortisation) is expected to be Rs. 1,184.9 crore, down 5.4% YoY and 16.1% QoQ, mainly because of the pressure from rising operational costs and a possibly less favourable product mix in the summer quarter.

Net profit is estimated at Rs. 745.6 crore, showing a 2% YoY increase but a 14.6% decline QoQ.

Gross margin for the company is expected at 51.5%, down 48 basis points YoY and 20 bps QoQ, while the EBITDA margin is likely to compress to 23.3%, falling 127 bps YoY.

Sector-Wide Outlook: FMCG Faces Weak Urban Demand

Urban demand for consumer sector products continues to remain weak, while rural markets are only gradually recovering.
The early arrival of the monsoon in many parts of India affected demand for summer-specific categories, including beverages, ice creams, and out-of-home consumption items, areas where Nestlé has high exposure.

Even though raw material prices like tea, palm oil, and wheat have started to fall, companies are still clearing high-cost inventory, delaying benefits. As per sector estimates, the gross margin for FMCG firms could contract by 170 basis points YoY, with EBITDA margins also falling by 130 bps.

The positive news is that this margin pressure is expected to ease from Q2FY26 onwards, as companies begin to source raw materials at lower costs.

"Volume growth is likely to remain in the low to mid single digits, while price hikes realised in 1QFY26 should aid overall revenue growth," the MOFSL report stated.

"The Nifty FMCG index has underperformed the broader market in the past year, falling 5% while the Nifty50 gained 4.7%. The current FMCG valuations are near their five-year average. Given this backdrop, we believe it is prudent to wait for more sustained demand signals before turning positive on the sector. In the interim, a selective approach appears more appropriate. We prefer companies that offer strong earnings visibility, driven by proactive portfolio transformation and distribution expansion, aligned with evolving consumer trends." An analyst at Philip Capital said in a note.

Nestle India Share Price Performance

At the end of trading on Wednesday, July 23, Nestle India shares closed at Rs. 2,450.00, up 0.27%. However, the stock has declined 0.71% over the past 5 days and has given 10.97% returns in the past six months, while rising 12.94% so far in 2025. Being a large-cap FMCG player in India, the company's market capitalisation currently stands at Rs. 2.36 lakh crore as of July 2023.